Fed Meeting Minutes, OPEC and Other Key Themes To Watch This Week

The last week of the year was as expected fairly quiet. The S&P 500 ($SPX) (SPY) finished the week basically flat but finished the year down a brutal 20%. This puts us firmly in bear market territory for the year. With a new year comes new hope of relief from the slumps that almost every sector has been facing, Tesla (TSLA) facing one of the most aggressive slumps down 60+% on the year. That's not saying too much though as most of tech ($IUXX) (QQQ) finished the year down 30+%. 

These moves produced some excellent options trading opportunities though, and playing both sides of the market had the potential to be incredibly profitable for the year. Here is hoping that next year produces the same opportunity that existed this year!

There are a lot of news releases on the docket for this upcoming week, here are Five themes that could have a large impact on trading!

Bank Holidays

Thankfully that should be the last bank holiday for a while. With the New Years being on a weekend this year, Monday markets will be closed in observance of it. The next Bank holiday is a few weeks out in January so we should have a week or two of normal trading. 

OPEC Meetings

OPEC Meetings include most of the world's oil-rich countries where they discuss all things energy and most importantly how much production increases or decreases, they think necessary. This meeting has the potential to really move energy markets and that could translate into movement in the energy sector for equities. And increase in production will likely see energy markets sell while a decrease will likely see them catch a bid. Either way it's possible this has larger implications for the equities market as a whole.

ISM Manufacturing PMI

As has been a theme for most of the second half of the year, ISM PMI could be a real market mover upon release. It will be released Tuesday at 10am EST and so far, this year it has produced some nice tradable moves in the markets. Eyes will be on this release to see if Fed policy is working or if it still needs additional aggressive tightening. It's possible that we continue to see the “good news is bad news” theme from this report and sell on a better than expected report. 

FOMC Meeting Minutes

It seems that the Fed has a lot of speakers these days. I remember when you only heard from them on rare occasions, but this is a large meeting for the Fed as they release what was discussed in their most recent meeting. While its likely rate hikes are still the norm, it's possible the aggressiveness of the hike is what the market keys in on. A less than expected hike could be seen as bullish, while a more aggressive hike has the potential to initiate some selling. Either way, care is needed if you trade around FOMC Minutes releases. 

ISM Services PMI

Services PMI is expected Friday at 10am EST. This has also been a market mover the second half of this year. With inflation being the 800lb gorilla in the room, it makes sense that this could overshadow the unemployment numbers that come out earlier in the day. Much like manufacturing PMI at the beginning of the week, this could send potential queues to the market about the aggressiveness of the tightening required for the new year. Keep an eye out for spikes in the indices around announcement time.

Best of luck this week and don’t forget to check out my daily options article.

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